House price growth slips to 1.9% in May: UK HPI

The latest provisional estimates from Land Registry have revealed that average UK house prices increased by 1.9% in the 12 months to May 2023, down from a revised 3.2% in April 2023.

Related topics:  Property,  House Prices,  UK HPI
Property | Reporter
19th July 2023
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According to this morning's data, average UK house prices stood at £286,000 in May 2023 - £6,000 higher than 12 months ago, but £7,000 below the recent peak in September 2022.

Average house prices increased over the 12 months to May 2023, to £304,000 in England (1.7%), £213,000 in Wales (1.8%), £193,000 in Scotland (3.2%) and £172,000 in Northern Ireland (5.0%).

The North East saw the highest annual percentage change of all English regions in the 12 months to May 2023 (4.0%), while the East saw the lowest (0.0%).

Nathan Emerson, Propertymark CEO, said: “Despite disappointing national economic news, it is clear that a core portion of the country is still looking to get moving and are not put off by current conditions.

“As sale prices drop, sellers are finding a middle ground with affordability, yet sellers are still making a gain, meaning the wheels of the market keep turning for all.”

Emma Hollingworth, Managing Director of Mortgages at MPowered Mortgages, comments:  “Given the steady rise in mortgage rates and high inflation levels, today’s figures are not unexpected. Buyer confidence has tempered in recent months, particularly with two-year fixed rates reaching the highest levels since the 2008 financial crash.

"However, we are beginning to see these rates stabilise in the last. Moreover, with energy bills falling we can expect inflation to trend in a more manageable direction, boosting buyer confidence in the long run.

“It is particularly important to recognise the impact this period will have on first time buyers, who are bearing the brunt of rising interest rates and are most stretched on affordability. While recent discussions on the mortgage charter reflect ongoing efforts from both the government and lenders to support those most impacted, first-time buyers should be seeking independent financial advice to work out how they can best achieve their homeownership goals."

Jeremy Leaf, north London estate agent and a former RICS residential chairman says: "This most comprehensive yet historic house price survey shows clearly the impact of stubbornly high inflation on mortgage rates and the knock-on effect on confidence which is keeping house prices in check.

"On the ground, appetite remains but worries over how far and how fast repayments will rise is highly relevant. Meanwhile, many sellers are not prepared to reduce to what is clearly a new market ’norm’.

"Better-than-expected inflation news is welcome, particularly if the figures can be sustained over the next few months. However, the fall may not be enough to stop further albeit modest interest rate rises in the near future."

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "Finally, inflation is not only moving in the right direction but has picked up some pace.

"Swap rates have been calmer in the past few days, resulting in fewer product pulls from lenders. It seems as though all eyes are on the latest inflation figures to determine what happens next and whether recent market volatility has settled.

"The markets have reacted favourably this morning, with five-year Swaps falling to 4.74 per cent from 4.97 per cent yesterday. If Swaps continue to move in this direction, some lenders may start to reduce pricing.

"There is a strong argument for the Bank of England to pause interest rate rises for now, giving the market time to settle down and adjust. Consecutive base rate rises have been painful; it’s time to let them take effect, rather than causing continued anxiety and distress for borrowers."

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